Foreign-currency deposits held by South Korean banks fell to its lowest in 18 months in March as companies sold off U.S. dollars amid weakening in the Korean won against major currencies.
According to data released by the Bank of Korea (BOK) on Monday, foreign deposits held by Korean lenders totaled $67.15 billion as of end of March, down $6.53 billion from the end of February. It is the smallest outstanding amount since the end of September, 2017, when the balance reached $63.66 billion. It is also the biggest fall since June, last year, when the value fell $7.17 billion.
Foreign currency deposits in banks include those held by Korean individuals and companies, as well as foreigners that have stayed in Korea for six months or more and foreign companies operating in the country.
Dollar-denominated holdings dropped $5.92 billion to $56.58 billion as companies upped dollar sales to pay off import bills in fear of further strengthening.
The BOK said that when the U.S. dollar strengthens against the local currency, importing companies use up dollar savings to make payments, responding sensitively to exchange rate fluctuations.
Deposits in yen amounted to $4.13 billion, down $420 million, during the same period, as companies upped spot exchange sales and used savings to pay off import dues amid strengthening of the yen.
Euro-denominated savings dropped $280 million to $3.43 billion while yuan deposits increased $60 million to $1.25 billion. Deposits held in other currencies including the pound sterling and Australian dollar jumped $30 million to $1.76 billion.
By holder, companies held $53.6 billion in foreign-currency deposits, down $5.61 billion during the same period, while individuals $13.55 billion, down $920 million, data showed.
By banks, local lenders held $57.1 billion in foreign-currency deposits, down $5.95 billion, while local branches operated by foreign banks $10.05 billion, down $580 million.
By Kim Yeon-joo and Lee Eun-joo
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]